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Frequently Asked Questions
  What reasons does Nasdaq deem acceptable when explaining why a company does not have the minimum number of diverse board members required under Nasdaq's Board Diversity Rule?
Identification Number 1771

Nasdaq does not assess the substance of the company’s explanation, but verifies that the company has provided one.  Nasdaq believes these disclosures provide stakeholders with a better understanding of the company’s current board composition and its philosophy regarding diversity.

The following are examples of such disclosures:

  • If a company is listed on Nasdaq Global Select or Global Market but believes that it is similarly situated to companies listed on Nasdaq Capital Market in terms of its annual revenues and public float, it may explain that for these reasons it therefore has chosen to meet the objectives of Rule 5605(f)(2)(C) applicable to companies listed on the Nasdaq Capital Market in lieu of Rule 5605(f)(2)(A). 
  • A U.S. company may disclose that it chooses to define diversity more broadly than Nasdaq’s definition by considering national origin, veteran status or individuals with disabilities when identifying nominees for director because it believes such diversity brings a wide range of perspectives and experiences to the board.
  • If under Israeli law regarding board diversity, an Israeli company is required only to have a minimum of one woman on the board and such Israeli company chooses to comply with Israeli home country law in lieu of meeting the diversity objectives of Rule 5605(f)(2)(B), it may choose to disclose that “the Company is incorporated in Israel and required by Israeli law to have a minimum of one woman on the board, and satisfies home country requirements in lieu of Nasdaq Rule 5605(f)(2)(B), which requires each Foreign Issuer to have at least two diverse directors.”

Publication Date*: 8/6/2021 Mailto Link Identification Number: 1771
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